Explain what action you would take following your discovery of the interest rate discrepancy and analyse how ethics business culture and personal morality

Explain what action you would take following your discovery of the interest rate discrepancy and analyse how ethics business culture and personal morality would influence how someone in your position might respond in this scenario.

 

Legal and Regulatory Requirements of Asset Finance

Description

Note

Your coursework should be between 2000 and 2500 words.

You should ensure that any quotes used conform to our exact referencing format. If references are used a reference list must be provided at the end.See the Course Site for guidance on referencing and creating a reference list.

The word count includes any: footnotes endnotes glossaries diagrams figures or tables. The word count does not include the title page or appendices. Appendices should be used occasionally with the intention of providing further detail about points made in the main body of the coursework. They will not be taken into account where they are used to include detail that should have been in the main body of the coursework.

Assignment

Answer all questions from both sections.

Section A

Case study scenario:

With several years’ experience as a new business administrator at a small independent asset finance company you were successful in applying for a new position as pay-out supervisor at a bank-owned asset finance company.

Your main responsibility in your new role is to carry out final checks on documentation for all larger transactions (where the net advance exceeds £250000) prior to them being authorised for pay-out.

One of the first cases presented to you relates to a hire purchase agreement with a long-established customer of the bank and all documentation has been completed ready for pay-out. However in the file are a number of copy emails between the customer and your Sales Manager. In one of the emails the customer asks the Sales Manager what the implicit interest rate is in the agreement and the response is that it is 6%. You check the calculations and find that the correct rate is 6.75%.

Required:

With reference to the above scenario answer the question below:

  1. Explain what action you would take following your discovery of the interest rate discrepancy and analyse how ethics business culture and personal morality would influence how someone in your position might respond in this scenario. (50 marks)

Section B

Required:

Answer both questions below:

  1. The Finance and Leasing Association’s Business Finance Code contains recommendations to customers taking out business finance agreements. Outline the recommendations and how they might assist those customers in gaining a positive outcome from using asset finance. (25 marks)
  2. In relation to fair treatment of customers (FTC) outline the outcomes that the Financial Conduct Authority expects FTC to
    achieve for consumers and how it expects asset finance companies to apply FTC.

(25 marks)

(Total = 100 marks)

Essential reading

Bank of England (2019) Financial Policy Committee [online]. Available at: https://www.bankofengland.co.uk/about/people/financial-policy-committee opens in new window

FCA (no date) CONC 2.5 Conduct of business: credit broking [online]. Available at: https://www.handbook.fca.org.uk/handbook/CONC/2/5.html opens in new window .

FCA (no date) Strengthening accountability in Banking [pdf] Available at: https://www.fca.org.uk/publication/documents/strengthening-accountability-in-banking-slides.pdf opens in new window

Llewellyn D. (1999) The economic rationale for financial regulation. Occasional paper series 1 [pdf]. Available at: http://www.fsa.gov.uk/pubs/occpapers/op01.pdf opens in new window

No actual limit on sources but please use a least a few from the above

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